Alabama Department of Insurance

[Notice issued May 1, 2008]

[Notice revised May 30, 2008]

The Alabama Department of Insurance (DOI) hereby gives notice of the issuance of Requests for Proposals (RFP) for qualified respondents to provide the DOI with the following professional services:

• Property and Casualty Insurance Actuarial Services
• Life and Disability Insurance Actuarial Services
• Certified Public Accountant Services
• Insurer Examination Services
• Insurer Investments Examination Services
• Computer Audit Services

Contracts are contemplated to be awarded for the term October 1, 2008, through September 30, 2009. Responses to the RFP must be received not later than June 3, 2008, at 3:00 PM CDT. Each RFP is made up of four individual documents (three in the case of CPA services), as follows: The RFP, the basic contract contemplated (which is Exhibit “A” to the RFP), the confidentiality agreement for use of TeamMate® software (which is Exhibit “B” to the RFP for all but CPA services), and a Disclosure Statement. All four documents (three in the case of CPA services) must accompany any response.

Additional information is set forth in the attached files, each accessible in either Word or Adobe format, as indicated:

• RFP for Professional Actuarial Services for Property and Casualty Insurance: Word | Adobe

  Exhibit A, Form Contract for P&C Actuary: Adobe

  Exhibit B, Confidentiality Agreement: Word | Adobe

• RFP for Professional Actuarial Services for Life and Disability Insurance: Word | Adobe

  Exhibit A, Form Contract for L&D Actuary: Adobe

  Exhibit B, Confidentiality Agreement: Word | Adobe

• RFP for Professional CPA Services: Word | Adobe

  Exhibit A, Form Contract for CPA Services: Adobe

• RFP for Professional Insurer Examination Services: Word | Adobe

  Exhibit A, Form Contract for Insurer Examination Services: Adobe

  Exhibit B, Confidentiality Agreement: Word | Adobe

• RFP for Professional Insurer Investments Examination Services: Word | Adobe

  Exhibit A, Form Contract for Insurer Investments Examination Services: Adobe

  Exhibit B, Confidentiality Agreement: Word | Adobe

• RFP for Professional Computer Audit Services: Word | Adobe

  Exhibit A, Form Contract for Computer Audit Services: Adobe

  Exhibit B, Confidentiality Agreement: Word | Adobe

The Disclosure Statement can be accessed from the Attorney General’s web site at the following address: http://www.ago.state.al.us/ag_items.cfm?Item=70

For the procedures and forms for foreign corporations to qualify to do business in the State of Alabama, please visit the web page for the Alabama Secretary of State at http://www.sos.state.al.us/.

PLEASE NOTE: BECAUSE THE DEADLINE FOR FILING PROPOSALS AS SHOWN IN THE RFP FALLS ON THE WEEKEND, PROPOSALS WILL BE ACCEPTED UNTIL 3:00 PM CDT ON TUESDAY, JUNE 3, 2008.

For additional information, please send an E-Mail request to Reyn.Norman@insurance.alabama.gov

REVISIONS TO THIS NEWS RELEASE AND RESPONSES TO QUESTIONS WILL BE POSTED BELOW.

• Question: When addressing potential conflicts of interest per section 4.2.2.5, should a listing of current industry clients that are domiciled or licensed in the state of Alabama be included? What is intended in this disclosure request?

  Answer: Those responding to the RFP should list all current industry clients that are domiciled or licensed in this state. The purpose for this is to avoid any conflict of interest.

• Question: Section 3.45 indicates that none of the services provided shall be subcontracted without the prior written consent of the DOI. Is it appropriate to include subcontractors (and their qualifications, pricing, etc.) in the RFP, with indication that they would not be used without the prior written consent, and they would comply with other provisions of this section?

  Answer: Yes.

• Question: Question Does this RFP contemplate or allow a bid for only the Market Conduct examination service?

  Answer: Answer: If the firm has qualified staff to conduct market conduct examinations please complete the RFP with those qualifications.

• Question: §2.1. states in part, “The DOI is soliciting responses from qualified respondents to provide the DOI with insurance examination consulting services for all type of insurers.” §2.1.1. states in part, “It is expected that the firm proposing to provide consulting services will have the following qualifications:” The section then lists subcomponents that are Financial examination conditions that have no counterpart in the Market Conduct examination. Specifically: §2.1.1.1. requires a minimum of one “Certified Financial Examiner” (CFE) on staff with 10 or more years of financial examination experience. CFE is a Financial Examiner designation and is not appropriate for a Market Conduct Examination. We have CIE's and MCM's with necessary experience. It would be reasonable to require a CIE or MCM with 10 or more years of Market Conduct examination experience.

  Answer: If the firm is responding only with regard to conducting market conduct examinations, please complete the proposal with the individuals holding the CIE designation.

• Question: §2.1. states in part, “The DOI is soliciting responses from qualified respondents to provide the DOI with insurance examination consulting services for all type of insurers.” §2.1.1. states in part, “It is expected that the firm proposing to provide consulting services will have the following qualifications:” The section then lists subcomponents that are Financial examination conditions that have no counterpart in the Market Conduct examination. Specifically: §2.1.1.3. requires experience in performing an EDP audit of an insurance company, including familiarity with the Information Systems Questionnaire (ISQ) in the Financial Examiners Handbook. EDP audits are almost always a Financial Exam function and they are usually performed as an examination separate from the normal Financial examination. No counterpart for MC is listed.

  Answer: This is a list of certain requirements that may be required. However all of these services will not be needed for all examinations. We do expect the firm to have working knowledge of computer auditing.

• Question: §2.1. states in part, “The DOI is soliciting responses from qualified respondents to provide the DOI with insurance examination consulting services for all type of insurers.” §2.1.1. states in part, “It is expected that the firm proposing to provide consulting services will have the following qualifications:” The section then lists subcomponents that are Financial examination conditions that have no counterpart in the Market Conduct examination. Specifically: §2.1.1.4. requires experience in providing documentation of examination procedures etc. that complies with NAIC accreditation requirements. NAIC accreditation requirements apply only to Financial examinations. They do not apply to Market Conduct examinations. There is no NAIC accreditation process for Market Conduct.

  Answer: You are correct, although we expect these will be adopted in the future.

• Question: §2.1. states in part, “The DOI is soliciting responses from qualified respondents to provide the DOI with insurance examination consulting services for all type of insurers.” §2.1.1. states in part, “It is expected that the firm proposing to provide consulting services will have the following qualifications:” The section then lists subcomponents that are Financial examination conditions that have no counterpart in the Market Conduct examination. Specifically: §2.2.1. requires the bidder to compute reserves and related liabilities during the examination of insurance companies. Computing reserves is not a Market Conduct examination function.

  Answer: This is a list of certain requirements that may be required. However all of these services will not be needed for all examinations.

• Question: §2.2.3. requires the bidder to evaluate investments. This is a Financial examination function not performed by Market Conduct examiners.

  Answer: This is a list of certain requirements that may be required. However all of these services will not be needed for all examinations.

• Question: §2.2.3. requires the bidder to coordinate the activity of all Zone examiners. The Financial examination is conducted on a Zone basis. Market Conduct exams are not. If this is referring to a multi jurisdiction Market Conduct examination, the current term of art is a multistate examination.

  Answer: That is correct.

• Question: §2.3. requires the bidder to employ an individual currently holding the designation “Certified Financial Examiner” (CFE) who shall supervise the examinations. This is a Financial examiner designation. The appropriate comparable for Market Conduct is the CIE designation and/or the MCM designation. These are different disciplines.

  Answer: The CIE designation will be acceptable if your firm only responds relative to market conduct examinations.

• Question: §2.7.1. discusses reimbursement rates but make reference from the Financial Examiners Handbook. For Market Conduct, the Market Regulation Handbook would be the appropriate reference.

  Answer: There is currently no reimbursement section in the Market Conduct Examiners Handbook; therefore, the financial handbook sections are used.

• Question: §4.2. states that: “The RFP response/proposal must be responsive to all requirements set forth in this RFP and prepared according to the form described in this RFP.” It is not possible for a Market Conduct examination only firm to honestly meet the above requirements unless modified to reflect the difference in the disciplines.

  Answer: Please respond as indicated above in response to the other questions.

• Question: Is a firm bidding under this RFP for only the Market Conduct examination service considered non-responsive if no entry is made for the Financial and Actuarial components. §4.2.2.4. states in part, “Proposal Responses must include specific hourly rates for all individuals that may provide services under any awarded contract, and must reflect all levels of required services.” (emphasis added)

  Answer: Please respond as indicated above in response to the other questions. Proposals that are limited to providing market conduct examination services only should be clearly noted as such.

• Question: Is ACL and TeamMate® software also required for Market Conduct Examinations?

  Answer: Yes. TeamMate® is used in Alabama Market Conduct Examinations.